KNG 202On its December 31, 2020 balance sheet, Calhoun Company appropriately reported a $10,000composition of Calhoun's portfolio of debt investments held as available-for-sale debt securities.debit balance in its Fair Value Adjustment account. There was no change during 2021 in theThe following information pertains to that portfollo:SecurityXYNCost$130,000100,000175,000$405.000Fair value at 12/31/21$160,00090,000125,000$375,000The amount of unrealized loss to appear as a component of comprehensive income forthe year ending December 31, 2021 isa. $40,000.b. $30,000.c.$20,000,d. $0.Bella Pool Company sells prefabricated pools that cost $80,000 to customers for $144,000.The sales price includes an installation fee, which is valued at $20,000. The fair value ofthe pool is $128,000. The installation is considered a separate performance obligation andis expected to take 3 months to complete. The transaction price allocated to the pool andthe installation isa. $124,541 and $19,459 respectivelyb. $144,000 and $20,000 respectivelyc. $128,000 and $20,000 respectivelyd. $110,702 and $17,298 respectivelySeasons Construction is constructing an office building under contract for CannonCompany and uses the percentage-of-completion method. The contract calls for progressbillings and payments of $1,550,000 each quarter. The total contract price is $18,600,000and Seasons estimates total costs of $17,750,000. Seasons estimates that the building willtake 3 years to complete, and commences construction on January 2, 2021.At December 31, 2022, Seasons Construction estimates that it is 75% complete with thbuilding; however, the estimate of total costs to be incurred has risen to $18,000,000to unanticipated price increases. What is the total amount of Construction ExpensesSeasons will recognize for the year ended December 31, 2022?a. $13,500,000b. $7,875,000c. $7,987,500d. $8,175,000

The unrealized gain or loss on the investment is determined by comparing the cost of the investment…

Answered: On its December 31, 2020 balance sheet,…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 19E

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Refer to the information in RE13-5. Assume that on December 31, 2019, the investment in Smith Corporation bonds has a market value of 12,500. Prepare the year-end journal entry to record the unrealized gain or loss.
During 2021, Anthony Company purchased debt securities as a long-term investment and classified them as trading. All securities were purchased at par value. Pertinent data are as follows: The net holding gain or loss included in Anthonys income statement for the year should be: a. 0 b. 3,000 gain c. 9,000 loss d. 12,000 loss
Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued October 1, 2019, are due September 30, 2020, and pay interest semiannually on March 31 and September 30. Assume an effective yield rate of 14%. Required: 1. Prepare a bond interest expense and discount amortization schedule using the straight-line method. 2. Prepare a bond interest expense and discount amortization schedule using the effective interest method. 3. Prepare adjusting entries for the end of the fiscal year December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. If income before interest and income taxes of 30% in 2020 is 500,000, compute net income under each alternative. 5. Assume the company retired the bonds on June 30, 2020, at 98 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight line method of amortization b. effective interest method of amortization 6. Compute the companys times interest earned (pretax operating income divided by interest expense) for 2020 under each alternative.
Frost Company has accumulated the following information relevant to its 2019 earningsper share. 1. Net income for 2019: 150,500. 2. Bonds payable: On January 1, 2019, the company had issued 10%, 200,000 bonds at 110. The premium is being amortized in the amount of 1,000 per year. Each 1,000 bond is currently convertible into 22 shares of common stock. To date, no bonds have been converted. 3. Bonds payable: On December 31, 2017, the company had issued 540,000 of 5.8% bonds at par. Each 1,000 bond is currently convertible into 11.6 shares of common stock. To date, no bonds have been converted. 4. Preferred stock: On July 3, 2018, the company had issued 3,800 shares of 7.5%, 100 par, preferred stock at 108 per share. Each share of preferred stock is currently convertible into 2.45 shares of common stock. To date, no preferred stock has been converted and no additional shares of preferred stock have been issued. The current dividends have been paid. 5. Common stock: At the beginning of 2019, 25,000 shares were outstanding. On August 3, 7,000 additional shares were issued. During September, a 20% stock dividend was declared and issued. On November 30, 2,000 shares were reacquired as treasury stock. 6. Compensatory share options: Options to acquire common stock at a price of 33 per share were outstanding during all of 2019. Currently, 4,000 shares may be acquired. To date, no options have been exercised. The unrecognized compens Frost Company has accumulated the following information relevant to its 2019 earnings ns is 5 per share. 7. Miscellaneous: Stock market prices on common stock averaged 41 per share during 2019, and the 2019 ending stock market price was 40 per share. The corporate income tax rate is 30%. Required: 1. Compute the basic earnings per share. Show supporting calculations. 2. Compute the diluted earnings per share. Show supporting calculations. 3. Indicate which earnings per share figure(s) Frost would report on its 2019 income statement.
Problem Reporting Long-Term Debt Fridley Manufacturings accounting records reveal the following account balances after adjusting entries are made on December 31, 2020. Required: Prepare the current liabilities and long-term debt portions of Fridleys balance sheet at December 31, 2020. Provide a separate line item for each issue (do not combine separate bonds or notes payable), but some items may need to be split into more than one item. Accounts payable $ 62,500 Bonds payable (9.4%, due in 2027) 800,000 Lease liability* 41,500 Bonds payable (8.7%, due in 2023) 50,000 Deferred tax liability* 133.400 Discount on bonds payable (94%, due in 2027) 12,600 Income taxes payable 26,900 * Long term liability Interest payable $ 38,700 Installment note payable (8%, equal installments due 2021 to 2024) 120,000 Notes payable (7.8%, due in 2025) 400,000 Premium on notes payable (7.8%, due in 2025) 6, [00 Note payable, 4% $50,000 face amount. due in 2026 (net of discount) 31,900
Information On its December 31, 2024 balance sheet, Pharoah Company appropriately reported a $10,000 debit balance in its Fair Value Adjustment account. There was no change during 2025 in the composition of Pharoah's portfolio of debt investments held as available-for- sale debt securities. The following information pertains to that portfolio: Security Date 11/1/2026 XYN Z Cost Instructions Record the year-end entry to adjust the debt investments to fair value. Account $138,000 108000 191000 $437,000 Debit Fair value at 12/31/25 $172,000 96000 141000 $409,000 Credit
On its December 31, 2024 balance sheet, Sandhill Company appropriately reported a $10,000 debit balance in its Fair Value Adjustment account. There was no change during 2025 in the composition of Sandhill's portfolio of debt investments held as available- for-sale debt securities. The following information pertains to that portfolio: Security X Y Z Cost $154000 116000 O $24000 O $0 O $14000 O $28000 199000 $469000 Fair value at 12/31/25 $200000 98000 157000 $455000 What amount of unrealized loss on these debt securities should be included in Sandhill's stockholders' equity section of the balance sheet at December 31, 2025?
On its December 31, 2024 balance sheet, Calhoun Company appropriately reported a $10,000 debit balance in its Fair Value Adjustment account. There was no change during 2025 in the composition of Calhoun's portfolio of debt investments held as available-for-sale debt securities. The following information pertains to that portfolio: Security XY N B) $0. OC) $40,000. Cost $130,000 OD) $30,000. 100,000 175,000 $405,000 The amount of unrealized loss reported as a component of comprehensive income for the year ending December 31, 2025 is OA) $20,000. Fair value at 12/31/25 $160,000 90,000 125,000 $375,000
On its December 31, 2020 balance sheet, Blossom Company appropriately reported a $10,000 debit balance in its Fair Value Adjustment account. There was no change during 2021 in the composition of Blossom’s portfolio of debt investments held as available-for-sale debt securities. The following information pertains to that portfolio: Security cost Fair value at 12/31/21 X $150000 $190000 Y 120000 105000 Z 215000 165000 $485000 $460000 The amount of unrealized loss to appear as a component of comprehensive income for the year ending December 31, 2021 is $35000. $25000. $0. $40000.
Sheridan Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2025. Amortized cost Fair value Expected credit loss (a) $50,800 41,600 12.450 Your answer is correct. What is the amount of the credit loss that Sheridan should report on this available-for-sale security at December 31, 2025? (Do not leave any answer field blank. Enter O for amounts.) Amount of the credit loss. $ 9200
Prepare adjusting entry to record fair value, and indicate statement presentation. E16.11 (LO 3), AP Financial Statement Writing At December 31, 2022, available-for-sale debt securities for Storrer, Inc. are as follows. The securities are considered to be a long-term investment. Fair Value $16,000 14,000 21,000 $51,000 Security A B с Cost $17,500 12,500 23,000 $53,000 Instructions a. Prepare the adjusting entry at December 31, 2022, to report the securities at fair value. b. Show the statement presentation at December 31, 2022, after adjustment to fair value. c. E. Kretsinger, a member of the board of directors, does not understand the reporting of the unreal- ized gains or losses. Write a letter to Ms. Kretsinger explaining the reporting and the purposes that it serves.
Marigold Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020. Amortized cost $51,100 Fair value 42,200 Expected credit losses 12,600 A. What is the amount of credit loss that marigold should report on this available-for-sale security at december 31, 2020? Amount of the credit loss $ 8,900 B. Prepare the journal entry to record the credit loss, if any ( and other adjustments needed), at December 31, 2020? date account titles and explanations debit credit 12/31/20 8,900 8,900 Please note that the answer is NOT Debit Loss on available for sale debt securities and Credit avilable for sale debt securities. These are the account titles I can choose from... Accumulated Other…

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